Tobacco tax hikes

By Rie Umano

On Feb. 4, President Barack Obama signed a law that will increase the tax on tobacco products. The proceeds from tax will be used to fund the State Children’s Health Insurance Program (SCHIP), which makes health care more affordable for children from low-income families. While the tax would be used to support an important program, some smokers are frustrated with increasing prices and burden. The federal government rose cigarette tax by 61.6 cents per pack, or $6.16 per carton. Now the total tax on cigarette now comes to about $10.10 per carton, or $1.01 per pack. While some thinks it is ridiculous that the government is picking only on smokers, the others think that it is better to tax on cigarette rather than water or gases which are necessary to everyone.
Not only smokers, but also tobacco companies are worrying about the sales decrease due to the tax increase. The tobacco manufactures are suffering from maintaining their profit margin while the sales profit is expected to decrease.
However, the sales decrease is not solely based on the tax increase. Ironically, some people would not quit smoking how much tax would increase. Gloria Egger, 83-years-old smoker says.”As old as I am, I am not going to quit smoking, regardless of what they do.” What really ironic is that increase in tax creates an incentives to bring cigarette illegally from other countries. It would decrease the sales of major U.S. tobacco companies even more and decrease in sales would lose the revenue for the state. The increase in tax might hurt the economy even worse.

Sources:
http://www.cnn.com/2009/US/04/01/cigarette.tax/index.html?iref=newssearch
http://www.mndaily.com/2009/03/10/federal-tobacco-tax-inequitable
http://www.usatoday.com/news/nation/2007-02-26-tabacco-tax_x.htm